Stalin
Well-Known Member
- Joined
- Apr 4, 2008
- Messages
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Even the UK, which has been the most slavish ally of the USA, adhering to every twist and turn of the latter's awful foreign policy
has finally realised that the old rules are gone and that the USA is a big bully that needs to be stood up to..
"..Liberation Day” was, of course, a tragic idiocy based on a bewildering inversion of reality. The rest of the world has not been ripping off or pillaging and plundering the US, as claimed by Trump launching his salvo of tariffs, the highest for a century. The truth is the opposite.
There is no American “national emergency”. The US still represents the same 25% of world GDP, as it did in 1980. More than half the goods it imports are from affiliates of US multinationals denominated and paid for in dollars, so its deficit is an accounting identity with itself rather than reflecting economic weakness.
The richest and most dynamic economy in the world has profited hugely from a global growth-promoting economic order that it created – one of rules-based open trade in goods and services undertaken in dollars. Its fake deficit in goods belies an economic strength that permits the US to be the world’s number one exporter of services in banking, consultancy, media and IT. This American wealth generation machine has been so aggressive in pursuing its self-interest that when taken to the limits – as in its relationship with the UK – its partners become de facto vassal states. Britain has not been pillaging the cream of US tech companies; rather, it has been stripped of its tech jewels by the US.
Even so, the rest of the world has benefited, with Asia in particular bootstrapping itself from poverty over the past 50 years. Certainly, there are American rust belt, manufacturing towns that have done badly – their working-class inhabitants left beached, their interests unprotected by enfeebled trade unions. But the rest of the US prospered, although the country is pockmarked by gross inequalities that American public policy has never properly addressed.
All has been wrecked by the economics of Trump, for whom the idea that trade is a win-win, promoting growth and opportunity, is inconceivable. To him, it is not possible that country A buys goods and services from country B because it offers what A can neither produce or not at such a low price – while A can sell other goods and services to B for the same reasons. Hence the simple algebra, subtracting imports from exports, and calculating a pro-rata, escalating tariff, is based on the view that a deficit can only exist because the US has been ripped off. Trump wants to put that “wrong” right, with the grotesque result that the richest country on earth is now imposing swingeing tariffs on the poorest – abandoning the global system that, however flawed, has served it and the world well.
Impoverished Lesotho, for example, must be a racketeer with its trade surplus built on its exports of irreplaceable diamonds; hence a tariff of 50%. The reason why Britain is levied a “low” tariff of 10% – the same as Iran – is because on US figures, we run a trade deficit. But Israel, arguably the US’s closest ally, made the error of running a surplus and so received a 17% tariff dictated by the algebra. Brexit did mean Britain was not lumped in with the EU, charged 20% tariff, but being “spared” springs sadly from our trade weakness that Brexit has accentuated. We have lost at least 5% of GDP from leaving the EU; now Trump will cost up to another 1% or worse, according to the National Institute of Economic and Social Research, and more again as the world potentially embarks on a full-scale trade war, heralded by China’s tit-for-tat tariffs on Friday. Equally, there is a growing chance of a full-blown American recession. In his great book The Great Crash, 1929, JK Galbraith wrote that the interaction of the self-feeding unwinding of a stock-market bubble, trade-crippling tariffs, overextended financial institutions, massive income inequality, economic ignorance and collapse of trust in economic leadership that were the proximate causes of the Great Depression would be unlikely to happen again. But he couldn’t be sure that stupid leaders, ignorance, greed and some of the proclivities of American capitalism would not repeat the same mistakes. So here we are in 2025 – doing just that. Britain, as an open economy outside the major trade blocs, is uniquely exposed.
comrade stalin
moscow
has finally realised that the old rules are gone and that the USA is a big bully that needs to be stood up to..
"..Liberation Day” was, of course, a tragic idiocy based on a bewildering inversion of reality. The rest of the world has not been ripping off or pillaging and plundering the US, as claimed by Trump launching his salvo of tariffs, the highest for a century. The truth is the opposite.
There is no American “national emergency”. The US still represents the same 25% of world GDP, as it did in 1980. More than half the goods it imports are from affiliates of US multinationals denominated and paid for in dollars, so its deficit is an accounting identity with itself rather than reflecting economic weakness.
The richest and most dynamic economy in the world has profited hugely from a global growth-promoting economic order that it created – one of rules-based open trade in goods and services undertaken in dollars. Its fake deficit in goods belies an economic strength that permits the US to be the world’s number one exporter of services in banking, consultancy, media and IT. This American wealth generation machine has been so aggressive in pursuing its self-interest that when taken to the limits – as in its relationship with the UK – its partners become de facto vassal states. Britain has not been pillaging the cream of US tech companies; rather, it has been stripped of its tech jewels by the US.
Even so, the rest of the world has benefited, with Asia in particular bootstrapping itself from poverty over the past 50 years. Certainly, there are American rust belt, manufacturing towns that have done badly – their working-class inhabitants left beached, their interests unprotected by enfeebled trade unions. But the rest of the US prospered, although the country is pockmarked by gross inequalities that American public policy has never properly addressed.
All has been wrecked by the economics of Trump, for whom the idea that trade is a win-win, promoting growth and opportunity, is inconceivable. To him, it is not possible that country A buys goods and services from country B because it offers what A can neither produce or not at such a low price – while A can sell other goods and services to B for the same reasons. Hence the simple algebra, subtracting imports from exports, and calculating a pro-rata, escalating tariff, is based on the view that a deficit can only exist because the US has been ripped off. Trump wants to put that “wrong” right, with the grotesque result that the richest country on earth is now imposing swingeing tariffs on the poorest – abandoning the global system that, however flawed, has served it and the world well.
Impoverished Lesotho, for example, must be a racketeer with its trade surplus built on its exports of irreplaceable diamonds; hence a tariff of 50%. The reason why Britain is levied a “low” tariff of 10% – the same as Iran – is because on US figures, we run a trade deficit. But Israel, arguably the US’s closest ally, made the error of running a surplus and so received a 17% tariff dictated by the algebra. Brexit did mean Britain was not lumped in with the EU, charged 20% tariff, but being “spared” springs sadly from our trade weakness that Brexit has accentuated. We have lost at least 5% of GDP from leaving the EU; now Trump will cost up to another 1% or worse, according to the National Institute of Economic and Social Research, and more again as the world potentially embarks on a full-scale trade war, heralded by China’s tit-for-tat tariffs on Friday. Equally, there is a growing chance of a full-blown American recession. In his great book The Great Crash, 1929, JK Galbraith wrote that the interaction of the self-feeding unwinding of a stock-market bubble, trade-crippling tariffs, overextended financial institutions, massive income inequality, economic ignorance and collapse of trust in economic leadership that were the proximate causes of the Great Depression would be unlikely to happen again. But he couldn’t be sure that stupid leaders, ignorance, greed and some of the proclivities of American capitalism would not repeat the same mistakes. So here we are in 2025 – doing just that. Britain, as an open economy outside the major trade blocs, is uniquely exposed.
Britain needn’t be cowed by wrecking-ball Trump, it should seize opportunities in Europe, Canada and beyond | Will Hutton
Keir Starmer can help redefine global trade while strengthening new – and old – alliances
www.theguardian.com
comrade stalin
moscow
